Business Markets (chapter 7)


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Business Markets (chapter 7)

  1. 1. Auren B. Galang Marketing Management Middle Managers 04.20.10
  2. 2. Business Marketing <ul><li>is the practice of individuals, or organizations , including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations. Also known as industrial marketing , business marketing is also called business-to-business marketing, or B2B marketing, for short. </li></ul>
  3. 3. B2B versus Consumer Marketing <ul><ul><ul><ul><li>Fewer, Larger Buyers </li></ul></ul></ul></ul><ul><li>Professional and Direct Purchasing </li></ul>
  4. 4. B2B versus Consumer Marketing <ul><li>Multiple Buying Influence </li></ul><ul><li>Demand in business is based on the consumer market but fluctuates with the business cycle </li></ul><ul><li>More Geographically concentrated buyers </li></ul>
  5. 5. Buying Situations <ul><li>Straight Rebuy – routine basis ordering usually from preferred suppliers; ex : office supplies </li></ul><ul><li>2. Modified Rebuy – the buyer wants to modify specifications, pricing, delivery terms </li></ul><ul><li>3. New Task – a purchaser buys the product for the first time. </li></ul><ul><li>Greatest opportunity and challenge to get into a certain institution. </li></ul>
  6. 6. Systems Buying and Selling <ul><li>Many business buyers prefer to buy a total solution to a problem from one seller called systems buying </li></ul><ul><ul><li>A prime contractor will be responsible in bidding out and assembling the systems subcomponents. </li></ul></ul>
  7. 7.
  8. 8. <ul><li>Systems contracting </li></ul><ul><ul><li>One variant of systems selling where a single supplier provides the buyer with his entire requirement of MRO ( maintenance, repair, operating ) </li></ul></ul>
  9. 9. Buying Center Gatekeepers Buyers Approvers Deciders Influencers Users Initiators Buying Center
  10. 10. <ul><li>Buying centers influence is both a rational and emotional decision as they both serve the organization’s and the individual’s needs. </li></ul>
  11. 11. The Buying Process <ul><li>Problem Recognition </li></ul><ul><li>General need description and Product Specification </li></ul><ul><li>Supplier Search </li></ul><ul><ul><li>E-procurement </li></ul></ul><ul><ul><li>Lead generation </li></ul></ul><ul><li>Proposal Solicitation </li></ul>
  12. 12. The Buying Process <ul><li>5. Supplier Selection </li></ul><ul><ul><li>Overcoming price pressures </li></ul></ul><ul><ul><li>Number of suppliers </li></ul></ul><ul><li>6. Order- Routine Specification </li></ul><ul><li>7. Performance review </li></ul>
  13. 13. Managing B2B Customer Relationship <ul><li>Benefits of Vertical Coordination </li></ul><ul><ul><li>TRUST </li></ul></ul><ul><ul><li>Transparent </li></ul></ul><ul><ul><li>Product / Service Quality </li></ul></ul><ul><ul><li>Incentive </li></ul></ul><ul><ul><li>Partnering with Customers </li></ul></ul><ul><ul><li>Cooperating Design </li></ul></ul><ul><ul><li>Product Comparison and Advice </li></ul></ul><ul><ul><li>Supply Chain </li></ul></ul><ul><ul><li>Pervasive Advocacy </li></ul></ul>
  14. 14. Risks and Opportunism <ul><li>RISK – in the form of specific investments </li></ul><ul><ul><ul><li>these are expenditures that are tailored to a particular company and value chain partner </li></ul></ul></ul><ul><li>Opportunism – is a form of cheating or under supply relative to an implicit or explicit contract </li></ul><ul><ul><ul><li>It may occur when the buyer cannot easily monitor supplier performance </li></ul></ul></ul>